IIFL Special Opportunities Fund has garnered commitment of approximately USD 1.1 billion. The fund was launched in February 2017 to generate long-term capital appreciation through investment in equity and equity related instruments of to-be listed companies. IIFL Special Opportunities Fund is a close-ended scheme under Category II Alternative Investment Fund - IIFL Private Equity Fund and registered with the Securities and Exchange Board of India, India.
Mr. Amit Shah, CEO of IIFL Asset Management Business, shares some insights about the fund and how global investors can benefit from the IPO market in India:
The uniqueness of IIFL Asset Management
IIFL Asset Management has been successful in creating a niche for itself in the industry by moving away from regular products. We provide a plethora of differentiated innovative products across asset classes backed by strong holistic research. Within this space, we are one of the largest players across asset classes, whether real estate, fixed income or equities. IIFL Special Opportunities Fund is a unique offering focusing on Pre-IPO and IPO space which has been introduced in India for the first time. This fund gives access to individual investors to participate in Initial Public Offer (IPO) and Pre-IPO opportunities, as institutional investors and has raised around US$1 billion.
Secondly, holding period for the stocks held by the fund is not one year from date of listing, rather than one year from date of investment. That gives us the flexibility to take a decision to exit slightly earlier. As an individual category, clients would find it very difficult to get access to such categories.
India's position in global economy
At the World Economic Forum, PwC released a report (Jan 2018) which shows India will be the fifth most attractive market for investments. The optimism over global economic growth is at a record level and in the case of India it is even higher. The International Monetary Fund forecast for India pegs it as the world's fastest growing emerging economy with growth at 7.4% in FY19, gaining pace to 7.8% in FY20. The World Bank in its latest India Development Update 2017 stated that the Indian economy is set to revert to its trend growth rate of 7.5 percent in the coming years as it bottoms out from the impact of the Goods and Services Tax and demonetisation.
Outlook for Indian equity market
At a micro level, after so many years we are seeing some positive signs coming in and thus we are quite bullish and optimistic about India for the next 12 to 24 months. While there could be bouts of volatility, for a long-term investor, we still believe equity as an asset class can give better post-tax risk-adjusted returns than other asset classes.
For the next 12-18 months, our view is that the growth trajectory would continue. Our GDP growth rate itself as an economy should be reasonably good and if that happens, obviously one would see some reflection in valuations also.
The IPO market & IIFL AMC
A large number of quality IPOs continue to hit the market. Selection of IPOs is the key to outperformance. Innovation has been a key card that we at IIFL Investment Managers have played to date. The momentum of 2017 is likely to continue as far as the IPO market is concerned. Indian companies and the central government are expected to raise around US$30 billion this year in equity and equity-linked offerings. A similar amount was raised in 2017 too and quality stocks have returned handsome gains.
Over the last few years IPO markets have done very well, and many IPOs have given triple digit returns. However, investors have found it difficult to access the IPO markets and benefit from it. IIFL Special Opportunities Fund is the first attempt to create an organized pool of capital to access this market. We are excited to be the first asset management company to introduce this unique offering to the investor community.
About IIFL Asset Management Limited
IIFL Asset Management Ltd. is part of IIFL Investment Managers. IIFL AMC is global asset management firm, launched in 2008 with the objective of providing differentiated investment products suited for the market environment. IIFL Asset Management Business refers to licensed asset management activity carried out by IIFL Investment Managers through its group companies based in Singapore, India and Mauritius. The AMC's differentiated suite of mutual funds, alternative investment funds and venture capital funds span public and private equities, fixed income securities and real estate. Its distinctive products bring out the entrepreneurial edge, agility and speed of execution of a boutique asset management firm.